Providing perspective on the economics and politics of sports business in Florida...and the Rays' campaign for a new stadium in Tampa Bay.

Monday, December 8, 2014

DEVELOPING: Rays, St. Pete Agree to Deal to Explore Tampa

I wasn't even done dissecting Sunday's "possible Tampa sites" story from the Times and boom - at 4:41pm on Monday afternoon - Stephen Nohlgren breaks this:

Rays and Kriseman reach agreement to allow Hillsborough stadium searchST. PETERSBURG — Mayor Rick Kriseman and the Tampa Bay Rays have reached an agreement to let the team search for new stadium sites in Hillsborough County in exchange for payments to the city if the team leaves before its contract at Tropicana Field expires in 2027.
Kriseman wants to the City Council to discuss the agreement at its meeting on Thursday.
Payments would be based on how many years would remain on the Trop lease if the Rays left, starting at $4 million a season until December 2018, dropping to $3 million a season from 2019 to 2022 and $2 million from 2023 through 2026.

Kriseman's office tells me the agreement is "unprecedented" and won't discuss any more until a press conference tomorrow morning at Tropicana Field. Tampa Mayor Bob Buckhorn won't talk either until at least tomorrow.

We also may not know for years if the language negotiated into the previously-ironclad contract properly protects the city/regional interests...or if it makes it easier for the Rays to one day leave town. But council members I spoke to were optimistic and expected easy passage Thursday.

2) The "damages" language
The team had failed for five years to negotiate an amendment to the contract, which dated back to the franchise's inception in 1998, largely because it requires incalculable damages if broken.

The agreement still stipulates that if the Rays leave the region altogether, "the Club recognizes the relocation of the Franchise to a stadium outside of Pinellas or Hillsborough prior to the end of the Term will result in irreparable harm to the City and damages that are not readily calculable."

3) Why so little payout?
The payments for a Tampa relocation also seem low - only $17 million if the team were to move to Hillsborough in 2020, for instance. It's even less when you figure inflation. And that includes zero dollars for missing the entire 2027 season. Why do the annual damages deflate?

There is also little consideration for Trop demolition or site prep (which may cost the city $10 million), and I'm not sure about compensation to the State of Florida, which will continue paying $2 million per year on the Trop into next decade.

But Kriseman, who negotiated the deal for nearly 12 months (after his predecessor was unable to finalize a deal for years), must have felt his leverage was limited and the benefit of securing a deal now outweighed the risk of continued negotiation.

Well the amount is in line with what I expected. This nonsense about the Rays paying down part of the cost of building the stadium 5 years before the team existed and 8 years before playing their first game was just nonsense. As I figured the city was trying to recoup infrastructure improvements, and city funded improvements from when the Rays signed the contract not the cost of stadium itself.

Disappointed they didn't negotiate different amounts for staying in the region vs leaving the region altogether. I think its going to make it tougher to get a stadium in Tampa, compared to Montreal.

It will be interesting to see how fast or slow the ball gets rolling on a new stadium.